Contributing Firms:
The Irish Tax Monitor April 2021
This Month's Roundtable

The Questions

Question 1: What are the implications for global corporation tax of last month’s announcement by US Treasury Secretary Yellen that the US has dropped the ‘safe harbor’ demand of the previous administration that would let, some companies opt out of new global digital tax rules? How is it likely to impact the prospects for movement this year on both Pillars of the OECD project, and is this likely to have a benefit for Irish companies of reducing the prospect of continued lingering uncertainty?

Question 2: With consolidation emerging in the aircraft leasing sector in the wake of Covid, how might the various corporation tax reform proposals potentially affect aircraft leasing in particular?

Question 3: The UK Budget – What are the implications of the decision to increase the UK corporation tax rate to 23%?

Question 4: What major opportunities and disadvantages potentially arise for ROI resident taxpayers from the UK Budget?

Personal Tax Focus .

Question 5: With corporation tax in question as a source of future taxation in the EU and the UK, (the recent Budget being an example) under pressure, some advisers have been suggesting that Ireland to maintain entrepreneurial and business competitiveness should look to increasing the incentives for small businesses and individuals to earn income and base wealth in Ireland in the future, as a fallback precautionary strategy. What major tax heads might be looked at in such a review?

Question 6: Ireland’s Tax Treaty Network Further to the Irish Tax Monitor’s discussion on Ireland’s 74 international tax treaties in the last issue, the new ‘Finance for Ireland’ Government Action Plan has set the expansion of the tax treaty network as a new objective in 2021. Can you provide your thoughts on immediate opportunities for this expansion.

Covid recovery.

Question 7: As businesses plan for the recovery, Government has continued to make concessionary moves to continue its support in view of the continued lockdown. Can you summarise some of the most significant of these, such as the concession allowing companies to reclaim R&D tax credit refunds early in 2021, and further business rates relief.


This Month's Roundtable - The Answers

Leasing, personal taxes, US corporate tax reform proposals, and Covid recovery

The experiences of the aircraft leasing sector, and the potential implications of international corrporate tax reform, notably pillar 5 of the BEPS processs serve as a case study in this issue of the Tax Monitor. As Deloitte’s Lisa Mangan points out, however, in the light of the discussion in this issue of the leasing sector The potential impacts discussed above are not limited to the aircraft leasing sector and would equally apply to consolidation in any sector. With corporation tax in question as a source of future taxation in the EU and the UK, some advisers have been suggesting that Ireland to maintain entrepreneurial and business competitiveness should look to increasing the incentives for small businesses and individuals to earn income and base wealth in Ireland in the future, as a fallback precautionary strategy. Jonathan Ginnelly, Director, Tax, Deloitte (opposite) provides a considerated response to our question as to what major tax heads might be looked at in such a review.

In This Month's Issue

Biden’s bid - a tectonic shift in a glacial process?

It may be risking exaggeration to speak of President Biden’s proposed corporation tax strategy as a tectonic shift in a process - global tax reform - that normally, and understandably is often described as advancing at a glacial pace. However, the strategic change in both attitude to corporation taxation by the leader of the free world, and signs that similar shifts may be occurring in other major countries, notably the UK, all point to the likelihood that, as the Chinese curse has it, that we may be living in ‘interesting times’. But, in any case, there should still be little to fear for a jurisdiction, like Ireland, that has benefited from a clear long term national tax strategy of its own - based on a commitment not to unfairly engage in the erosion of other countries’ rightful tax bases, and a desire to ‘play fair, and play to win’.


Analysis - Special Feature

Ireland and the ATAD Interest Limitation Rules: action on the way in Budget 2021

The fifth, and final, action by Ireland in implementing the EU’s Anti Tax Avoidance Directive (ATAD) is due to be unveiled in the 2021 Irish Budget this autumn. Deloitte’s Marine Opperman assesses the scenario that will lead up to the Government’s expected announcements, issues of importance to many companies, and financial institutions operating at the margin of FS and other sectors, such as aircraft leasing.